LONDON – With Wizz Air backtracking on the return to Russia using its Abu Dhabi subsidiary to get past sanctions, it’s clear that this was a mistake from the get-go. Welcome to The Editor’s Corner.
The Editor’s Corner is an op-ed series from AviationSource Editor-in-Chief James Field, who is going to give his thoughts (Maybe controversial) on all things going on in the aviation industry.
In case you have missed the last 19, feel free to browse through them before you continue to read this piece:
- The Editor’s Corner #1: The Industry Isn’t Ready for Summer 2022 Demand
- The Editor’s Corner #2: JetBlue’s Offer for Spirit Airlines Will Change The American Airline Dynamic
- The Editor’s Corner #3: Boris Johnson’s Damage To The Aviation Sector is Another Reason for Resignation
- The Editor’s Corner #4: PLAY Will Transform The Market with a Post-Pandemic Edge
- The Editor’s Corner #5: Detriment of the Boeing 737 MAX & 787 Is Causing a 777X-Based Aftershock
- The Editor’s Corner #6: Qantas’ Plans For The Future Will Turn Around Negative Times
- The Editor’s Corner #7: The P2F Market Is Hotting Up…
- The Editor’s Corner #8: O’Leary Is Gunning For Another Cheap Boeing Order
- The Editor’s Corner #9: Ukraine Crisis: Turkish Airlines’ A350 Snap-Up from Aeroflot May Have Something To Do With A Red Carpet…
- The Editor’s Corner #10 – Ukraine Crisis: Lessors Will Not Win The Russia Battle
- The Editor’s Corner #11 – Spirit Airlines Are Slowly Changing Their Mind…
- The Editor’s Corner #12 – The Indian Air Cargo Market Is Hotting Up
- The Editor’s Corner #13 – Video Footage From RedAir Flight 203 Highlights Dangers of Carrying Luggage During an Evacuation
- The Editor’s Corner #14 – The Spirit-Frontier-JetBlue Battle for Merger Will Be Remembered As A Mess
- The Editor’s Corner #15 – Flyr, Norse & Norwegian Have Opportunity to Capitalise on SAS’ Woes
- The Editor’s Corner #16 – The Airbus & Boeing Battle Will Heat Up At Farnborough
- The Editor’s Corner #17 – My Predictions for Farnborough Were Well Off…
- The Editor’s Corner #18 – Why Do Airports & Airlines Fight Over Chaos When Government is to Blame?
- The Editor’s Corner #19 – Manchester Airport Has Resolved Its Chaotic Period – But Improvements Are Needed…
Ukraine Crisis: Wizz Air Abu Dhabi’s Russia Return Was A Mistake From The Get-Go
Wizz Air’s return to Russia through the Abu Dhabi subsidiary was a mistake from the get-go, given the fact that they were trying to curtail sanctions to generate revenue.
It is clear also that only some airlines could have gotten away with doing this, more notably with Turkish Airlines laying out the red carpet for Russian tourism.
Whilst it is understandable that Wizz Air wants to capitalize on certain markets, now is not the time to do it in markets that are volatile and are being opposed to by the West.
Wizz Air Blames Backtrack on “Supply Chain Limitations”…
In a statement to their passengers, Wizz Air blamed the backtrack on supply chain limitations:
“Wizz Air Abu Dhabi, the ultra-low fare national airline of the UAE, regrets to inform its customers that the airline has had to defer the start date of its flight operations from Abu Dhabi to Moscow until further notice due to industry supply chain limitations”.
In my opinion, supply chain limitations seem a bit vague, and are probably more of an excuse to counteract the backlash it has received for wanting to restore operations to Moscow & Krasnodar.
With the Abu Dhabi Government not placing sanctions on Russia, this did give Wizz Air the route it needed to restore the operations, but in the wake of the backlash, it’s clear they probably wouldn’t sell many tickets as a result.
Russia Is A Lucrative Market…
It is clear that Russia is a lucrative market, as many carriers are wanting to return to the region. Only a select few carriers at the moment are able to operate in Russia without sanctions looming over them.
Carriers such as Emirates, Turkish Airlines, Flydubai, and others are currently reaping the benefits of high tourist demand that is pent-up from the Ukraine Crisis sanctions limiting destination choice.
Pre-crisis, domestic RPKs out of Russia increased by 23.8% in January, with this being caused by further connectivity options from international carriers as well.
So it does show ultimately that demand is pent-up, it’s just for the wrong reasons at this stage.
Failed Attempt At Copying The Turkish Airlines Effect…
For Wizz Air Abu Dhabi, this backtrack represents a failed attempt to replicate what Turkish Airlines are doing at present.
As mentioned in a previous AviationSource article, it was announced by the Turkish government that they would welcome new airlines and tourists into the region.
This also amounted to loans valued at around £240m, all despite the ongoing sanctions instigated by NATO and the West.
With nations gearing up to acquire a major stake in upcoming summer holidaymakers in Europe, Turkey has seized an opportunity to attract Russian holidaymakers who are banned from other parts of Europe.
Effectively, the Turkish government has rolled out the red carpet for Russia and has allowed for some economic stimulus to head in their direction as a result of this.
Such stimulation is needed on the Russian side as sanctions are beginning to bite.
As mentioned by Boycott Russia, Turkish Airlines will allocate an additional 25 aircraft for Russian flights and will increase the frequencies to 300 flights per week, offering around 1.5m seats in terms of capacity.
Does The Turkish Airlines Effect Work for Legacy Carriers Only? Socio-Economic Perspectives…
From a socio-economic perspective, maybe the resumption of Russian flights only works for legacy carriers, meaning passengers who wish to spend more for comfort aren’t too phased by what is going on.
It’s the same with Emirates who still provide flights into Moscow from Dubai, offering easy access into the region for those who want it.
Because Wizz Air aims more for the low-cost aspect, they are more susceptible to backlash caused by their own passengers, who may be more politically sensitive to such issues.
With many legacy passengers wanting to pay for comfort and to get from A to B, this could be less of a priority in the back of their minds, which is why such carriers have been expanding frequencies out of Russia.
Overall: Wizz Air Abu Dhabi Will Have To Hold Off Until Crisis Eases…
What remains clear is that Wizz Air is going to have to hold off from re-entering Russia until the crisis eases or comes to some form of a conclusion.
Because of their clientele, and rightly so should I add, now is not the time to expand into markets that are being contested on a purely political scale.
Too much negative PR will affect ticket sales in that region, meaning that Wizz Air should probably leave the job of Russian flights to the legacy carriers, who can afford to take that level of damage.
Either way, this is an indicator of where Wizz Air wishes to take its Abu Dhabi subsidiary next, and it will be interesting to see what the alternative market will be instead.